## Cross-Border Banking and Regulatory Reforms: Implications for Africa from International Experience

## Source details

**Canonical URL:** [Cross-Border Banking and Regulatory Reforms: Implications for Africa from International Experience](https://www.imf.org/-/media/files/news/seminars/session-iii-lyndon-nelson.pdf)

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- [Markdown version](/-/media/files/news/seminars/session-iii-lyndon-nelson.pdf.md)
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### Home and Host Issues
- 1 Child very different from the parent
- 2 Reliance on Home supervisor
- 3 Bank more important to country, than country is to bank
- 4 Child very dependent on the parent

### Ownership, Risk Areas, and Supervisory Priorities (percentages as reported)
- OWNERSHIP 67%
- ACCOUNTING 61%
- LARGE EXPOSURES 65%
- CONDUCT 72%
- CONSOLIDATEDSUPERVISION 65%
- RISK MANAGEMENT 82%
- OPENNESS 74%
- GOVERNANCE 50%
- TREASURY 60%
- OPERATIONAL RISK 64%
- MARKET RISK 74%
- CREDIT RISK 74%
- (Additional figure) 70%

### Home and Host Solutions: Equivalence
- Cost:Benefit decision whether gaps can be filled
- Host Regime versus Home Regime

### Home and Host Solutions: Co‑operation
- Ensure that there are no underlaps
- Aim for this (full coverage), not this (gaps)

### Home and Host Solutions: Systemic Risk
- 1 Have clear thresholds for the identification of Systemic Risks
  - a Focus on Critical Economic Functions
- 2 Have a toolkit for dealing with the Systemic Presences
  - a Require greater cooperation with Home
  - b Impose greater prudential standards
  - c Prescribe what legal form the presence can take - eg Subsidiarisation

### Home and Host Solutions: Legal Form
- Branches
  - Shared Responsibility
  - More capital efficient for bank
- Subsidiaries
  - Sole Responsibility
  - Less capital efficient for bank
  - Need to be very clear on what business is booked in the Subsidiary

### Home and Host Solutions: Resolution
- 1 Have a clear plan
- 2 Determine ambition for removing barriers to resolution and execute according to that ambition
- 3 Be clear whether Global Strategy is Single Point of Entry or Multiple Point of Entry
  - a Be clear whether this Global Strategy is going to work for you
    - (i) Understand the business model pre and post resolution
    - (ii) Be clear if you have to be an undertaker or a resurrectionist

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_Source: https://www.imf.org/-/media/files/news/seminars/session-iii-lyndon-nelson.pdf_